Data Scientists Evaluate Credit Risk to Help Lenders, Borrowers
BY CHRISTIE...
Overview
Complete the Picture of a Consumer’s Payment Performance
Payment Instrument (PI) Risk Score determines creditworthiness, identifies high and low risk consumers, as well as the compliance risks associated with processing payments. This FCRA compliant credit decisioning score strengthens the financial profile of the consumer, helping to mitigate fraud, reduce defaults and returns.
Enhance strategies or profiles with an alternative data score that provides a different lens to view consumers. The PI Risk Score is fueled by over 400,000 banking and payment data sources associated with debit cards, pre-paid cards, credit cards, bank accounts, merchants, payment platforms, and payment processors. This service provides actionable insights based on the consumer’s transactions, behaviors, and characteristics.
This score can be used as is or combined with any of our other services to complete the consumer’s financial profile, access greater actionable insights and enhance predictive power.
Overview
Analyzing risks
Payment Instrument Risk Score identifies good and bad borrowers, as well as the compliance risks associated with processing payments.
This non-credentialed service analyzes thousands of attributes to enhance the financial profile of the consumer, helping to mitigate fraud, reduce defaults and reduce returns. The attributes evaluated include transactions, behaviors, and characteristics associated with debit cards, pre-paid cards, credit cards, bank accounts, contributory databases, payment platforms, and payment processors.
This score can be used as is or combined with any of our other services to complete the consumer’s financial profile, access greater actionable insights and enhance predictive power.
Use Case Solutions
Protect Against Fraud
Mitigate the threat of fraud by confirming identities and accounts associated with suspicious activity.
Fill the Credit History Gap
PI Risk Score leverages the most recent transaction and current status of accounts to capture the behaviors of consumers within the last several days.
Frictionless User Experience
Getting consumers to connect their bank account can be a difficult process. Access timely bank account information without consumer interaction.
Determine Risk
Get critical insight with scoring that identifies high, moderate, and low risk consumers that are not covered by traditional credit sources.
Find New Customers
Bridge the gap between traditional credit data and alternative banking data. Enhance decisions and gain extra insights missing from traditional credit reports.
Ensure Compliance
Comply effortlessly with an easy to understand score that meets FCRA and local regulatory requirements.
What is a Payment Instrument Score?
What the Payment Instrument (PI) Risk Score means?
The PI Risk Score is a number that predicts the likelihood that a consumer will pay their bill on time, pay back a loan, or other credit obligations, in a timely fashion. The higher the score, the lower the risk. Using a mathematical algorithm, the PI Risk Score looks at a consumer’s credit activities and behaviors, account length and history, new account creation velocity, payment instrument transaction history, and the characteristics of the financial institutions issuing the accounts.
The PI Risk Score does not look at the total or type of debt a consumer has, nor does the PI Risk Score look at whether there was a bankruptcy, lien, judgement, or foreclosure. The more recent, frequent, and severe the negative items are, the bigger the impact on the overall PI Risk Score. The PI Risk Score number helps you more accurately understand credit risk.
How is the PI Risk Score Determined?
The score is calculated from the data obtained out of a consumer’s bank account, debit card, and contributory databases made of financial institutions and thousands of retail merchants. The PI Risk Score considers information about types of accounts, account balance histories, account statuses, transaction patterns, and other factors.
The PI Risk Score ranges from 600 – 1400. Unlike traditional credit scores that rely on merchant account history, the PI Risk Score only requires your applicant to have a bank account.
Why Does the PI Risk Score Matter?
The PI Risk Score makes the credit decision process faster, more fair, and enables you to provide alternative credit choices to compete for the consumer’s business.
The PI Risk Score is calculated in real time and because it relies on live account status information from banks and financial institutions, you get a result that is reflective of the consumer at the time you make the request. This differs from scores obtained elsewhere that may have been calculated in the past time or using information from a credit bureau, or a different score model.
Because we incorporate the status of the payment instrument into the PI Risk Score, it can also be used to validate the bank account and card information.
Case Study
Consumer lender finds an additional 7% of applicants to originate.
A consumer lender under pressure to grow their portfolio consulted with ValidiFI’s Data Science team. Utilizing the recommended PI Risk Score, they were able to identify declined and rejected applicants who have the same default risk as their approved and originated customer pool. The lender aligned the PI Risk Score to its models and launched a new initiative, significantly expanding their customer pool and increasing good originations by more than 7%.
The addition of the PI Risk Score enabled the lender to scale with resiliency, representing a significant growth opportunity.
Case Study
Consumer lender finds an additional 7% of applicants to originate.
A consumer lender under pressure to grow their portfolio consulted with ValidiFI’s Data Science team. The PI Risk Score was able to identify declined and rejected applicants to have the same default risk as their approved and originated customer pool. The lender aligned the PI Risk Score to its models and launched a new initiative, that increased good originations by more than 7%.
The addition of the PI Risk Score enabled the lender to scale with resiliency, and represented a significant growth opportunity.
Reaching More Consumers with Banking and Payment Data
A CARD ISSUER...
